McCormick Reports Third Quarter Results
Earnings per share for the nine months ended August 31 were 73¢, up 11% over the comparable period last year. Net sales for the nine months were $1.3 billion, an increase of 4%.
The Company's U.S. food business had excellent results for the quarter, recording a 10% sales increase and a comparable operating profit increase due in part to distribution gains announced earlier this year. Overall results were dampened, however, by unfavorable currency exchange rates in a number of foreign markets, and the Company's plastic packaging business has been impacted by persistent weak market conditions in Asia.
Commented Robert J. Lawless, President & CEO, "This marks the eighth consecutive quarter of earnings improvement. We are pleased with performance for the quarter, which was driven by our U. S. consumer business. We continue to be challenged by weak foreign currencies in certain countries and the negative impact of the Asian economy on our packaging business.
"Overall, sales and profits continue to grow. Our underlying business is strong, and we expect that our growth will continue into the fourth quarter and beyond."
Consolidated Income Statement
(in thousands except per-share data)
Three months ended Year ended
(Unaudited)
11/30/98 11/30/97 11/30/98 11/30/97
NET SALES $585,698 $556,974 $1,881,146 $1,800,966
Cost of goods sold 357,509 338,060 1,232,222 1,172,328
Gross profit 228,189 218,914 648,924 628,638
Percentage 39.0% 39.3% 34.5% 34.9%
Selling, general and administrative expense 143,171 141,146 463,779 461,022
Restructuring charge (credit) 1,507 113 2,315 (3,227)
Operating income 83,511 77,655 182,830 170,843
Interest expense 9,622 9,281 36,935 36,332
Other (income) expense, net (2,701) (3,395) (6,604) (7,795)
Income from consolidated continuing operations
before income taxes 76,590 71,769 152,499 142,306
Income taxes 27,573 25,915 54,900 52,653
Net income from consolidated continuing operations 49,017 45,854 97,599 89,653
Income from unconsolidated operations 1,061 2,336 6,229 7,762
Net income from continuing operations 50,078 48,190 103,828 97,415
Income from discontinued operations,
net of income taxes - - - 1,013
NET INCOME $ 50,078 $ 48,190 $ 103,828 $ 98,428
EARNINGS PER SHARE - BASIC
Continuing operations $0.69 $0.65 $1.42 $1.29
Discontinued operations - - - 0.01
EARNINGS PER SHARE - BASIC $0.69 $0.65 $1.42 $1.30
Average shares outstanding - basic 72,668 74,397 73,259 75,658
EARNINGS PER SHARE - DILUTED
Continuing operations $0.68 $0.65 $1.41 $1.29
Discontinued operations - - - 0.01
EARNINGS PER SHARE - DILUTED $0.68 $0.65 $1.41 $1.30
Average shares outstanding - diluted 73,242 74,606 73,886 75,852
Condensed Consolidated Balance Sheet
(in thousands)
11/30/98 11/30/97
Assets
Receivables $ 212,804 $ 217,198
Inventories 250,893 252,084
Prepaid allowances 143,722 130,943
Property - net 377,032 380,015
Other assets 274,602 275,992
Total assets $ 1,259,053 $ 1,256,232
Liabilities and shareholders' equity
Short-term borrowings $ 163,679 $ 121,302
Other current liabilities 354,255 376,947
Long-term debt 250,363 276,489
Other liabilities 102,585 88,384
Shareholders' equity 388,171 393,110
Total liabilities and shareholders' equity $ 1,259,053 $ 1,256,232